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The Midwest, like the rest of the United States, lives largely on trade. But if we leave trade policy to officialdom in Washington, that lifeline is in danger. This is the impression I took away from a recent Washington conference on trade. It was definitely a pro-trade affair, dedicated to celebrating and strengthening America’s global trade position. As such, it attracted a crowd almost evenly split between business and industry people, government officials and journalists – all folks who should know what’s going on in this field. The text for the day was an excellent paper by Matt Slaughter, a highly-regarded Dartmouth professor and a government advisor under both Republican and Democratic administrations. Slaughter’s paper, “How America Is Made for Trade,” gave a national view to a series of regional papers sponsored by HSBC bank, including one I wrote on the Midwest’s trade in manufactured goods. For me, the high... Continue reading

The American South races ahead, creating a society based on excellence, while the Midwest lags behind, mired in the tradition of a glorious past. Chicago excepted, of course. That’s the contention of Aaron Renn, who blogs as The Urbanophile. Like all of Renn’s work, it’s informed, provocative and required reading. Which is not to say he’s right. As you’ll see, Renn notes that the South has seized national dominance in college football – currently, seven of the 10 top-ranked teams are in Dixie. He quotes the New York Times’ explanation: “The SEC sold excellence. The Big Ten sold tradition.” Renn then goes on to say that Southern cities are creating a new and superior civilization, through sheer ambition and imagination, while the Midwest slowly decays. Southerners, he says, have “massively elevated their game in the last 40 years and are working hard to keep getting better...Meanwhile, the Midwest is regressing... Continue reading

The Great Recession has spawned a shelf of books, many of them good, on what went so wrong. So far this year, we’ve had at least two first-rate books on where we are now and what will happen next. The first was Capital in the Twenty-First Century, the much praised study of wealth inequality by Thomas Piketty, discussed here earlier. Now comes The Shifts and the Shocks: What We’ve Learned – and Have Still to Learn – from the Financial Crisis, by Martin Wolf, the esteemed economic columnist for the Financial Times. Both authors argue that the big problems – inequality, for Piketty, or economic instability, for Wolf – are built into our free-market system, and are exacerbated by globalization. In other words, unless we not only reform but transform this system, both inequality and instability will get worse. Wolf predicts more crises, bubbles, busts, and recessions ahead and wonders... Continue reading

For more than a century, the Midwestern landscape has sparkled with small educational gems, private colleges devoted to the liberal arts. Most of them are located in small towns and cities which boomed in the Industrial Age but have seen better days. What is the relationship now between these small colleges and the towns that surround them? Can the colleges and the liberal arts help their towns recover their economic vitality? Can these schools ignite the revival of their towns, or are some of the towns so far gone that they might pull their colleges down into the wreckage of the post-industrial Midwest? These thoughts were front and center last week when one of these colleges, Albion, inaugurated a new president, Mauri Ditzler, who has been president of another one of them, Monmouth, for the past nine years. Ditzler has made it his goal to use Albion College and the... Continue reading

The beheadings by ISIS of two American journalists can be called many things – medieval savagery, unconscionable cruelty, the pointless murders of two brave men. But one thing they are not is an attack on the United States that demands retaliation by the American government. I say this as a former correspondent, in full admiration for James Foley and Steven Sotloff and in sympathy for the terrible price they paid for plying their trade in the most dangerous place in the world. What’s more, I think Foley and Sotloff would agree. To understand why, it’s necessary to talk about what war correspondents do, why they do it and, especially, their relationships with governments and officials – not only with foreign governments or foreign forces such as ISIS but with their own. American journalists are an independent lot. They see themselves as lone warriors, answerable to no one but their editors... Continue reading

When the Midwest votes on November 4, it will have a major – perhaps decisive – impact on the balance of power: both in Congress and in the region’s statehouses. But oddly enough, it won’t tell us much about the national mood or influence any national arguments. With Labor Day just past, we’re now into the political season. Between now and election day, the many races that have been growling in the background will move to the front burner. The Midwestern states are the traditional swing states. Except for Republican Indiana and Democratic Illinois, most political races in this region – especially for statewide offices, such as for governorships and US Senate seats – can go either way. For that reason, many pundits will look to these off-year elections for clues to how the region will vote in the presidential ballot two years from now, when the candidate who wins... Continue reading

So many Midwestern towns and cities have lost so much. Local banks vanish. So do local banks, high schools, businesses. In both small towns and the poorer neighborhoods of big cities, too many components of civilization have gone away. But when much else goes, libraries remain. Like schools, local libraries stand as outposts of learning and windows on to a wider world. In a time when many Midwestern children - urban and rural both – grow up in a bookless world, libraries offer a vision of another and richer way to live. Several things recently have brought this to mind. One is the violence in inner city regions, from Chicago’s Englewood to the St. Louis suburb of Ferguson, where young people are growing up in poverty, in homes where paying the electricity bill takes priority over books, where the road to a better life can be very hard to find.... Continue reading

American corporate leaders love to complain about the nation’s high corporate tax rate, one of the highest in the world. This rate, they say, is stifling business investment and encouraging U.S. corporations to move their headquarters to other countries. It sounds logical. But it may not be true. A scholarly look at global tax payments, coupled with an on-the-ground look at the effect of taxes on business investment, suggests that these corporate leaders not only are crying wolf but may be blowing smoke. (This may seem an odd topic for this blog this week, considering the urban crisis here in the Midwest, in the St. Louis suburb of Ferguson, where mutual distrust between black residents and white police has exploded into violence. I’m going to give this a pass for the simple reason that I haven’t been in Ferguson in years and know nothing about what’s going on there now.... Continue reading

Midwestern farmers need to have a good talk with the executives at Walgreens. Otherwise, they may end up like the big drugstore chain, with a big political black eye coupled with a hit to their bottom line. As most readers know, Walgreens considered using its purchase of a European pharmacy chain to move its corporate tax headquarters to Switzerland. The so-called “inversion” would have saved Walgreens billions in corporate taxes over the years. But it also would have stiffed its American customers and communities, not to mention the country that nurtured its rise over the past 113 years. The plan, coupled with similar moves by other companies, raised a political furor. Everyone from President Obama on down accused Walgreens of greed at best and treason at worst. After a few days of this battering, Walgreen caved and agreed to keep its corporate HQ in Illinois and, like its customers and... Continue reading

Everybody knows the problems with Midwestern manufacturing – the shift to the Sun Belt, followed by outsourcing and now, the technology revolution. These woes don’t need detailing because, when we think of manufacturing in the Heartland, it’s what comes immediately to mind. Which is why it’s useful to remind ourselves that manufacturing in much of the Midwest is alive, well and growing. The fact is that the old industrial belt both produces and exports more manufactured goods than it ever did. This doesn’t mean that manufacturing will ever again generate the mass employment that it did in the bygone days of assembly lines and blast furnaces. It still accounts for a lot of good jobs, but will never again be the basis of a middle-class economy, as it was in Chicago and so many other Midwestern cities in the post-World War II years. Manufacturing, in fact, looks a lot today... Continue reading

Whether booming or busting, no two cities are alike. But each has something to learn from others, especially in the brutal post-industrial competition ushered in by the age of globalization. Nobody is doing a better job of comparing cities in the Midwest than the Federal Reserve Bank of Chicago. We’ve written earlier about the Industrial Cities Initiative, a comparison of the differing destinies of ten mid-size industrial cities across the Fed’s five-state area. Now Rick Mattoon, the first-rate senior economist and economic advisor in the Chicago Fed’s Economic Research Department, has compared aspects of the largest cities in each of the five states. The first installment, focused on Des Moines, appears in the blog hosted by Bill Testa, the Chicago Fed’s vice president for regional programs and itself an invaluable source of information on the Midwestern economy. The five-city report, co-authored by Mattoon and Norman Wang, a former associate economist... Continue reading

Few politicians have seen their reputations dive so far and so fast as Richard M. Daley, the former mayor of Chicago and the symbol of what’s great and what’s grim about the city he ruled for 22 years. Daley is in the news right now because of the 10th anniversary of his greatest achievement, Millennium Park, the splendid lakefront spread that crowned the city’s rebirth from the depths of its Rust Belt squalor. Millennium Park sparkles, no question about it. It’s a huge tourist draw. It’s given the city a central meeting place, Chicago’s own Tuileries. It’s a dazzling assembly of sculpture, art, fountains, music, gardens, fun, and culture. It also ran way over budget, created debts that the city is still paying, and included allegedly corrupt sweetheart deals that may yet land Daley in court. In a way, Millennium Park sums up much of Daley’s reign, the longest in... Continue reading

The world, and the Midwestern part of it, are on their own for the next three weeks. The Midwesterner is taking a mid-summer break, and will be back in mid-July. We leave town with a wish that sunny skies and balmy breezes soothe these days for all of you. Continue reading

Last week we reviewed the work of Thomas Piketty, the French economist whose surprise blockbuster, Capital in the 21st Century, charts a growing inequality, especially in the United States. According to Piketty, this inequality is caused mostly by the mega-salaries paid to CEOs and financial moguls and by the concentration of wealth and capital in the upper 1 percent. But inequality has two engines—not only growing wealth at the top but falling wealth everywhere else, and the bulging gap between them. Piketty argued that the rich are getting richer, but he didn’t have much to say about the rest, except by inference, which we’ll discuss later in this blog. Some new studies have tackled this problem of the left-behinds. Much of what they have to say will ring true for Midwesterners and other Americans, especially young people seeking a toehold in the new economy. Piketty basically said that much of... Continue reading

Thomas Piketty is a problem. If the best-selling French economist has got it right, much of what we thought we knew about economy and society—about how the world really works—is wrong. For instance: A rising tide doesn’t lift all boats. Inequality in wealth and income is the norm, not an aberration. A properly-run market economy is an engine for inequality and unfairness. It’s going to get worse, unless government does something about it. This isn’t the economic theory that most of us learned in school, and that still dominates most academic thinking and government policy. No wonder the attacks have already begun on Piketty’s book, Capital in the Twenty-First Century. These attacks, too, will get worse. So far, Piketty seems to be weathering them well. At 577 pages (plus 90 pages of notes), Capital is a doorstopper. But it’s a publishing sensation, the blockbuster of the year. Even Amazon ran... Continue reading

More than any region, the Midwest lavishes seven-figure pay packages on the presidents of its big public universities. At the same time, too many of these universities are trimming full-time faculty while their students run up some of the biggest student loan debt in the nation. It’s time to ask whether students at the Midwest’s flagship schools are getting their money’s worth. All this comes from the list of executive compensation at public colleges published annually by The Chronicle Of Higher Education, and a new paper, “The One Percent at State U,” issued by a progressive Washington think tank, the Institute for Policy Studies (IPS). The Chronicle listing showed that nine presidents of public universities netted more than $1 million in total compensation in 2012-13, and that five of them led Midwestern institutions. All by himself at the top was E. Gordon Gee, the gaffe-prone and free-spending president of Ohio... Continue reading

Inequality, a growing social and political issue in the United States, has become particularly acute in the industrial Middle West. This makes sense, considering the transformation of the industrial economy that once supported millions of middle-class jobs across the region. But new statistics show that this perception is reality, with inequality growing particularly fast in such states as Illinois, Ohio, and Michigan. The statistics come from the Martin Prosperity Institute (MPI), the Toronto-based home of urbanologist Richard Florida, and they appear in one of the articles that Florida writes regularly for The Atlantic Cities website. The site, and Florida’s thoughts, contain some of the most useful writing on urban issues today. Much of the growing inequality in the Midwest can be blamed on the usual suspects—the rich are getting richer, the poor are getting poorer, the 1 percent is outpacing the 99 percent, the uneducated are out of luck, and... Continue reading

It’s no news that the American news business is in flux and in trouble. The powerful newspapers and giant networks that dominated journalism in the last half of the 20th century have fragmented into shards of new media, blogs, social media, and websites seemingly tailored for every possible taste. The journalistic past is all but dead, but the future is barely glimpsed. Technology drives this transformation, and the technology itself evolves daily. What’s left are two huge questions: Who’s going to pay for and buy the journalism of the future? What does this mean for democracy and the nation? Media—what we used to call the press—is a business: it has to pay for its journalism and turn a profit. But it is the only business cited and protected by the Constitution: the first amendment specifically forbids government from impeding the freedom of the press. There’s a reason. The founders knew... Continue reading

Once upon a recent time, most of what we read appeared in our local newspapers, or maybe the Time magazine we bought at the corner drugstore. Now the web delivers a daily blizzard of articles, op-eds, blogs, think pieces, and other journalism. One blog leads to another. Friends send email with interesting links. Every day, I read something new and think, “Gee, everybody should read this.” So, in lieu of a blog this week, here’s a reading list of recent items that caught my eye. Most deal with the economy, or jobs, or globalization. Some are Midwestern, others national. Each deserves a few minutes of your time. (And if you've got some suggestions of your own, please let us hear about them.) John McCarron, Chicago Tribune, on Wandering Corporations John McCarron, the Chicago journalist and teacher, writes on The Great Vamoose of so-called American corporations, like Walgreen's, exploring moves to... Continue reading

My wife arrived at our apartment building at the same time as a young man delivering groceries from a local supermarket. She held the door for him. He thanked her and smiled sourly, almost apologizing for his state in life. “Not much for a college degree, is it?” he said. No indeed. But how typical was he? We hear so much about the parlous job situation for college grads these days. The papers are full of anecdotes of well-educated young Americans emerging with a degree, a lifetime of debt, and no job at all. Nor any place to live for their childhood bedrooms in their parents’ homes. Nor any real idea how to access the adulthood for which their four years on campus was supposed to prepare them. But how bad is it really? Things clearly are tougher now than they were for their parents’ generation. But is this bad... Continue reading

There’s a theory, held by some American pundits, that Vladimir Putin’s menacing of Ukraine is all our fault. Here’s the argument: In the 1990s, Moscow had just lost the Cold War. The Soviet Union had broken up. The Warsaw Pact was dead. Russia was down and all but out. Instead of being gracious winners, the West gloated. We brought Poland and most of Moscow’s other allies into NATO. We expanded the alliance eastward all the way to the former Soviet border. By rubbing it in, we guaranteed that, sooner or later, we’d get a future nationalistic Russian leader—Putin, for instance—bent on avenging this humiliation by hitting us where he could—Ukraine, for instance. According to this theory, if we’d just treated Russia more like an equal and foregone NATO expansion, Putin would be running a proper parliamentary democracy and diplomatic harmony would rule from the Azores to Vladivostok. Not likely. To... Continue reading

The drive to reorganize the Midwest into economically sensible regions moves ahead slowly, but it does move. I was reminded of this recently when I spent time with people working to make it happen in northwestern Illinois, a beautiful backwater that is trying to figure out its future. The core organization here is the Tri-County Economic Development Alliance (TCEDA), which embraces all or part of three counties just east of the Mississippi River. TCEDA held its first annual meeting on a bluff high above the river, and I came away with two thoughts: They’ve still got a long way to go, but: The thinking and talking I heard there wouldn’t have happened five years ago. TCEDA is trying to get Carroll, Whiteside, and Jo Daviess counties to work as one unit. The region is barely a speck on the Midwestern map, but it hangs together in its unique geography, its... Continue reading

There’s more than tax breaks to attracting a business to a state. Such as whether that business may have gay employees—even executives—who don’t want to live in a state that treats them as third-class citizens. That didn’t used to be a problem, when most gay business people were closeted and the same-sex marriage issue was barely on the to-do list of gay rights advocates. That’s changing now, fast. Seventeen states, including three Midwestern states, recognize same-sex marriage, with more sure to come, possibly this week: a circuit court has stayed until Wednesday the ruling last week by a federal court in Michigan which struck down that state’s constitutional ban on same-sex marriages. The gay marriage issue points up other problems for more conservative states, including some in the Midwest. How many global companies, especially scientifically-based ones, are anxious to move their operations and employees to states, such as Ohio or... Continue reading

We’ve been here before, we and the Russians. We’ve stood eyeball to eyeball, playing double-dare in international politics, mostly in Eastern Europe, plotting just how far we can push the other guy before he pushes back. Back then we called it the Cold War. We didn’t think the possibility of another Cold War would loom quite so quickly, but it has. By and large, we got the last one right. What do we do now? Just before the Sochi Olympics, I published another post on What Makes the Russians Tick?, stressing that the differences between us and the Russians have little to do with Vladimir Putin and a lot to do with a millennium of history and a deep cultural divide. As I noted, this is far from my usual beat. But before I returned to the Midwest, I spent a journalistic career bookended by the Cold War, starting with... Continue reading